Jeremy Corbyn said the face of British politics had changed and called on Theresa May to resign after her snap general election left Britain with a hung parliament 11 days before Brexit talks begin.

Speaking as he was returned as MP for Islington North, the Labour leader declared: “Politics has changed. Politics isn’t going back into the box where it was before. What’s happened is people have said they’ve had quite enough of austerity politics.”

Corbyn said May had called the election to assert her authority. “She wanted a mandate. Well, the mandate she’s got is lost Conservative seats, lost votes, lost support and lost confidence. I would have thought that is enough for her to go.”

What is a hung parliament?

When no single party can get enough MPs to form a majority on its own in a general election, parliament is said to be "hung". This happened at the 2010 election. The leader of the party with the most seats is given the opportunity to try to form a government. This can take two forms: a formal coalition with other parties or a more informal arrangement, known as “confidence and supply”, in which the smaller parties agree to support the main legislation.

The Conservative leader appeared crushed as she accepted her victory in the constituency of Maidenhead with a shaky speech in which she repeated her resolve to provide the stability the country needed before Brexit talks.

“If the Conservative party has won the most seats and most votes then it will be incumbent that we will have that period of stability and that is what we will do,” she said, but her long-term future remained uncertain.

By the early hours of Friday morning, pressure was mounting on the prime minister as Tory MP Anna Soubry broke ranks to say May should “consider her position”.

“It is bad. She is in a very difficult place … It was a dreadful night. I’ve lost some excellent and remarkable friends,” she said. “This is a very bad moment for the Conservative party and we need to take stock and our leader needs to take stock.”

Senior Conservative sources said recriminations were already beginning among cabinet ministers, with David Davis singled out by some of his colleagues for pressing May to gamble on holding the snap poll. “There are a lot of very very pissed off people in the cabinet – and with him in particular,” said one.

The former chancellor George Osborne described it as a “catastrophic” result while another Conservative MP said: “She needs to go.”

The tight result, first indicated in a shock exit poll on Thursday night that showed the Conservatives likely to be the largest party in a hung parliament, represented a disastrous night for May.

Shortly before 6am on Friday, Labour held two key seats in Southampton to bring its total to 258 so far and deny the Conservatives the possibility of securing a majority. It was projected the Tories would end up with fewer than 320 seats.

The failure of the prime minister’s election gamble, taken when the party was more than 20 points ahead in the polls, triggered uncertainty on the eve of Brexit talks, causing a drop in the value of sterling.

Speaking from his home in Islington, north London, shortly after midnight, the Labour leader said: “Whatever the final result, we have already changed the face of British politics.”

Labour secured a first ever win in the previously safe Conservative seat of Canterbury, and also took control of Peterborough, which was one of the Brexit capitals of the country. There were also gains for Corbyn’s party in Battersea, Stockton South, Bury North and Vale of Clwyd.

A difficult night for the SNP delivered one of the biggest scalps, with the party’s Westminster leader, Angus Robertson, losing his seat in Moray.

The former Lib Dem leader and deputy prime minister, Nick Clegg, spoke out about the need for the government to be sensitive about huge societal divisions as he was defeated by Labour in Sheffield Hallam.

The party’s leader, Tim Farron, hung on to his seat in Cumbria, while Vince Cable regained the Twickenham seat he lost in 2015.

The Conservative minister, Ben Gummer, a close ally of the prime minister and a key author of the party’s manifesto, lost in Ipswich while the financial secretary to the Treasury, Jane Ellison, was defeated in Battersea, south-west London.

The home secretary, Amber Rudd, faced a recount in a tight race in Hastings but just held on.

It was a bad night for Ukip, in which the party’s leader, Paul Nuttall, came third in Boston and Skegness, and it was crushed in its former seat of Clacton.

The foreign secretary, Boris Johnson, said the Conservatives had to listen to constituents as his own majority fell – but bookies also slashed the odds of him becoming the next Tory leader.

The shock result came after a gruelling seven-week battle in which supporters of Corbyn flocked to almost 100 rallies across the country in a vibrant and energetic campaign.

The Labour leader ended a tour of several seats starting in Glasgow on the final day of campaigning with a speech on the edge of his constituency in Islington, where he said that Labour’s anti-austerity message represented the “new centre ground” of British politics.

Corbyn sustained a string of attacks from Conservatives and also parts of the media, with a number of newspapers calling on their readers to reject him in Thursday’s poll.

John McDonnell, the shadow chancellor, hit out at the negative and “nasty” tactics of his opponents, insisting Labour had stuck to upbeat arguments.

“I think it does change the nature of political discourse. I think people have got fed up with the yah-boo politics and some of the nasty tactics that have gone on recently.”

May’s effort was seen as more turbulent given her U-turn over social care plans and the decision to base the entire thrust of the campaign on her character appearing to backfire. Recriminations focused on the party’s manifesto, which caused division at the top of the party.

Holding on to his seat with a big majority, the Labour deputy leader, Tom Watson, said. “It looks likely to be a very bad result for Theresa May. She said: ‘It is a fact that if we lose just six seats, we will lose our majority and Jeremy Corbyn will become prime minister.’ We do not yet know the final result, but we intend to hold her to that.”

Fears that hung parliament projected would delay Brexit negotiations sent the pound plunging in the minutes following the exit poll publication. The pound fell as much as 2% to $1.27 – the lowest level in six weeks – but then stabilised while dealers awaited the first actual results.

Jeremy Cook, the chief economist at World First, said that if the exit poll proved to be correct it could drive sterling to $1.24 although not as low as the levels it plunged to following the Brexit vote almost a year ago.

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One insider in Labour HQ – known as South Side – said an entire floor had been converted into several war rooms, scattered with whiteboards, television screens and lists of seats. Gathered there were key figures such as Labour’s general secretary, Iain McNicol, and key Corbyn advisers including Seumas Milne, his deputy, Steve Howell, and the author of the manifesto, Andrew Fisher.

Conservative advisers had appeared relatively confident about winning a majority as they headed into the final 24 hours. Privately, they were discussing the potential for a reshuffle of May’s team on Friday, rather than mulling over the possibility of her exiting Downing Street.

May would not be drawn on what scale of majority she would consider a success, but said on Tuesday that she was “feeling good” about the campaign. The senior election team gathered at party headquarters in Matthew Parker Street in Westminster, claiming at first that it was “early days” but later failing to speak out at all.

The prime minister’s election campaign was dominated by visits to Labour-held seats in areas considered to be the party’s heartlands such as the West Midlands, Yorkshire and the north-east.

While David Cameron spent much of the 2015 battle in Liberal Democrat-Tory marginals, May’s tour included the ultra-safe Labour seat of Birmingham Ladywood, launching a battlebus in North Shields and unveiling her manifesto in Halifax, which last turned Conservative in 1983.

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Earlier one Labour candidate said colleagues were feeling downbeat, with fears of a 100-plus majority for May, but they later admitted they had been wrong.

The campaign was heavily affected by the two devastating terror attacks in Manchester and London Bridge, which moved security questions up the agenda, with accusations being thrown in all directions.

The Lib Dems acknowledged they had faced a difficult campaign in which an expected fightback failed to come to fruition. The party’s hardline anti-Brexit position had cut through less than was hoped as domestic issues such as the NHS and schooling and the fallout of two terror attacks dominated. However, there were some pleasing gains for the party.

During polling day there were reports of students from Keele University being turned away at polling stations in the ultra-marginal Newcastle-under-Lyme constituency.

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The Labour candidate there, Paul Farrelly, who was under pressure after Ukip stepped aside to help the Conservatives defeat him, reacted angrily to reports that hundreds could have been affected by a failure to update the registration data.

“The electoral services department here in Newcastle is a shambles and there is chaos, which is denying people votes on a scale unprecedented in my 30 years fighting and organising elections,” said Farrelly, who is defending a majority of just 650 in a seat where Ukip won more than 7,000 votes in 2015.